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Congressman Peter Roskam Explains Benefits of Income Tax Bill

The following piece by Congressman Peter Roskam originally appeared in Crain’s Chicago Business. It is reprinted with permission of the Congressman

Roskam: The House tax plan benefits everyone

Roskam: “We are fighting for hardworking taxpayers and a healthy economy so that we can grow our economy and allow America to compete and win. Under this tax plan, everyone benefits and everyone has the same opportunities.”

For too many years Americans have endured a broken tax code that punishes hardworking taxpayers.

Peter Roskam

Over the years, special interest groups and lobbyists have used their influence to manipulate our tax system into something that is too costly, too complex and unfair to the vast majority of American taxpayers.

We don’t have to live like this. We can transform our tax code into something that works for more Americans; something that respects and rewards hard work; and something that Americans deserve.

When individuals file their taxes every year, they can opt for one of two types of deductions. The majority of Americans—and 49 percent of constituents in the 6th Congressional District, which I represent—take the standard deduction. The remaining taxpayers take itemized deductions.

The Tax Cuts and Jobs Act proposes a dramatic increase in the standard deduction to $24,000 for a family, doubling the current standard deduction. Because taxpayers choose between standard and itemized deductions, we expect a significant shift from the 49 percent of people who currently itemize to the standard deduction, since it would maximize their deduction. This means that the more moderate-income taxpayers who currently itemize would see a sizable decrease in their tax bill using the standard deduction.

Some have said that this plan would eviscerate the state and local tax deduction. This is simply not true. For Americans who choose to itemize, mortgage interest, property tax deductions and charitable contribution deductions are still available to them. This bill maintains the property tax deduction (up to $10,000), the mortgage interest deduction (for a loan up to $500,000) and the charitable deduction. The average family of four in the 6th district—which encompasses DuPage County as well as parts of suburban Cook, Kane and Lake counties—makes $135,000 and, taking advantage of the child tax credit, could save over $5,000 annually on their itemized federal income tax.

Probably the most egregious and unfair tax affecting over 30,000 of my constituents is the Alternative Minimum Tax, which limits their ability to take advantage of deductions because of an outdated policy that hits the middle class. We’re eliminating taxes like the Alternative Minimum Tax that punish the success of hardworking families.

Currently in my district, the average taxpayer making less than $200,000 annually using the property tax itemized deduction does not deduct more than $10,000 in property taxes; 89 percent of the total number of returns filed in 2014 had less than $200,000 annual income. That 89 percent would see the largest tax relief as a percentage of their tax bill.

However, it’s not just middle class Americans that would see tax relief; Americans at every income level would receive tax relief under this bill, and individual tax rates are part of that equation. Testimony by the nonpartisan Joint Committee on Taxation reaffirms that this tax bill provides tax relief at every bracket.

Everyone would benefit from the decrease in the marginal tax rates. Tax brackets under this plan would drop the lowest tax bracket to zero; the remaining four federal income tax brackets would be 12 percent, 25 percent, 35 percent and 39.6 percent. For example, a family making $90,000 or less would fall into the 12 percent tax bracket and a family making $90,001 to $260,000 would fall into the 25 percent tax bracket for income earned above $90,000. Many hardworking small business owners would also see a benefit through the reduced rate on pass-through business income.

The Tax Cuts and Jobs Act is good legislation. It respects and rewards hard work by allowing taxpayers to keep more of the money they earn in their paychecks. We are fighting for hardworking taxpayers and a healthy economy so that we can grow our economy and allow America to compete and win. Under this tax plan, everyone benefits and everyone has the same opportunities.

Peter Roskam, R-Wheaton, is the U.S. representative for Illinois’ 6th District and chairman of the House Tax Policy Committee.

To be fair, bred winner, there’s a gazillion ways to parse the data on this point.

But if using the most likely source you drew the 39% figure from (these seem to run in packs), that same source identified that 36% of the nation’s gross annual income is made by that same 1%.

So you’re arguably saying that the 1% is out of step by 3% overpayment relative to income

That’s not so bad for a tax system that is designed to be progressive.

Moreover, these figures compute only income to the earner and not all ‘wealth’ is of that variety, so in reality the wealth of the 1% may exceed 36% as a ratio of national wealth in any given year.

Regardless of how you argue the data points, to claim that another taxpayer doesn’t get the right to chime in on what tax rates should be is a bit imperious.

Our system of governance does not condition participation on whether you are an economic plus or minus to the system (and efforts to do this have been found unconstitutional by the SCt).

Moreover, the manner in which someone determines that these low wage earners are ‘drags’ is contested.

You can be certain that the average WalMart employee is contributing to the total national wealth through their efforts, even if the portion they get is undersized compared to the corporation who is reaping the lion’s share of reward from the labor.

If you could advocate that there be a basic minimum wage that was above the $39k AGI which would guarantee everyone ‘puts in’, I”m sure the checkout guy at Wally World would gladly take that deal even if it meant they were paying more in taxes.

Patrick, get a 2016 blank 1040 form and instructions and determine what a one percenter with a $1M AGI pays in federal taxes vs what the top end range ($39K AGI) of the bottom 50 percent pays in federal income taxes.

Don’t you love it when miserably confused souls come to the defense of the 1%ers? Tax the rich; make them pay their fair share, and most importantly, stop trashing the poor, immigrants, and minorities. I know, that Jewish carpenter again comes into play…tic, tock, tic, tock, tic, tock…

Goofy left wing liberals and useful idiots who defend and make excuses for the invasion of our country of illegal aliens from various countries from the world OR law abiding citizens such as the top one or ten percent of U.S. earners who provide up to 70 percent of all federal taxes paid.

Illegal aliens in our Nation are under the umbrella of protection of the U.S. thanks to the billions of dollars provided by the top one and ten percent that provide for our Nation’s defense and many other government agencies that serve illegal aliens as well as the bottom 50 percent that pay ONLY 3 percent of all federal taxes collected.

Illegal aliens and the bottom 50 percent of taxpayers ought to be grateful to those patriotic Americans who bear the burden of the majority of taxes they pay to our federal government.

Don’t you love it when compassionate conservatives become creatively poetic in expressing their disdain toward undocumented immigrants? The new modality is the protection given by the umbrella of the almighty military of the United States global empire…or so the nonsense goes. We know them all too well. Income and wealth inequality in the United States is obscene. Tax the rich; make them pay their fair share; close tax-evasion loopholes including offshore tax havens, and stop trashing minorities and undocumented immigrants. Wait a minute! I just remembered this is the intolerance sanctuary sunshine blog, home of the parallel universe of McHenry county compassionate conservatism…tic, tock, tic, tock…

The republican tax cut bill is designed to favor millionaires and billionaires. Why is this so difficult to accept? Stop advocating for the well being of the incredibly wealthy and trashing the weak and vulnerable in our society. roskam, can you hear the clock ticking? Lean forward…tic, tock, tic, tock, tic, tock…